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May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · May 4, 2017 · 52 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 1
    Investor Presentation Q2 Fiscal 2017 Update May 4, 2017 1
  2. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 2
    Quality Assets Exceptional Location Unique Integration Upstream 1.8 Tcfe Proved Reserves (1) 785,000 net acres in Appalachia - mostly held in fee with no royalty 3 million Bbls annual CA crude oil production Midstream 285 million…
  3. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 3
    Balanced Earnings and Cash Flows Adjusted EBITDA by Segment ( millions) 1,500 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment Utility Segment Energy Marketing & Other 1,000 953 852 843 815 789…
  4. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 4
    Flexibility to Responsibly Deploy Capital Capital Expenditures by Segment ( millions) 1,500 Exploration & Production Segment (1) CapEx Reconciliation for JDA Proceeds (millions) E&P Total NFG Gathering Segment Gross CapEx 256 523…
  5. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 5
    Northern Access Project Status National Fuel Remains Committed to Building the Northern Access Pipeline Project Project in-service not expected before 2019 due to regulatory delays February 3, 2017 NFG received FERC 7(c) certificate…
  6. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 6
    The Bridge to Northern Access National Fuel Will Continue to Grow Integrated Businesses While We Sort Through Northern Access Delay Near-term in-basin pricing supports plans for 10%+ annual production growth over next 3 years WDA…
  7. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 7
    Near-term Capital Budget and Operating Plan Capital Expenditures by Segment (MM) FY2017 Operating Plan 1,000 Exploration & Production Segment (1) Upstream Gathering Segment Appalachia: Pipeline & Storage Segment 2 rigs (1 WDA / 1…
  8. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 8
    Strong Balance Sheet & Liquidity Debt/Adjusted EBITDA Capitalization 2.66 x 2.57 x 2.27 x 1.89 x Total Equity 1.77 x 44% Total Debt 56% 3.7 Billion Total Capitalization 2013 2014 2015 2016 TTM Fiscal Year End 03/31/17 as…
  9. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 9
    Committed to the Dividend Annual Dividend Rate ( /share) NFGs Dividend Consistency 2.00 Consecutive 114 Years Payments 1.50 Consecutive 46 Years Increases 1.00 Current Dividend 1.62 per Share Rate 0.50 Current Dividend…
  10. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 10
    Upstream Overview Exploration & Production 11
  11. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 11
    Upstream Significant Appalachian Acreage Position Western Development Area (WDA) Fee Acreage Lease Acreage Daily gross production: 280 MMcf/d EDA - 70,000 Acres WDA - 715,000 Acres Large inventory of high quality Marcellus…
  12. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 12
    Upstream Marcellus Shale: Western Development Area WDA Tier 1 Acreage 200,000 Acres WDA Highlights Large drilling inventory of quality Marcellus dry gas 1,100 locations economic < 2.00/MMBtu realized Fee acreage provides…
  13. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 13
    Upstream WDA Clermont/Rich Valley Development CRV Development Summary Gross daily production: 270 MMcf/d 1-rig/daylight only frac crew Marcellus well costs averaging 660 per lateral ft. Developing 75 Marcellus wells with…
  14. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 14
    Upstream Best in Class Marcellus Well Costs Marcellus Drilling Cost per Foot Marcellus Completion Cost per Stage (000s) 300 275 300 248 208 200 174 200 153 148 120 110 109 91 100 100 67 58 0 0 2012 2013 2014 2015 2016…
  15. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 15
    Upstream Marcellus Shale: Eastern Development Area EDA Highlights EDA Acreage 70,000 Acres 1 DCNR Tract 007 (Tioga Co., Pa) 1 Utica and 2 Marcellus producing wells 1 Utica 30-day IP = 15.8 MMcf/d Utica resource potential 1 Tcf…
  16. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 16
    Upstream Utica Shale Opportunities Pennsylvania Utica Activity Senecas Utica Opportunities Senecas Utica Activity on Trend with Shell Strong Results in Northern Pa. JKLM Seneca Western Development Area EDA Seneca First 2…
  17. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 17
    Upstream WDA Utica Update First Two Utica Test Wells in WDA CRV Area Continue to Exceed Marcellus Performance WDA-CRV Utica WDA-CRV Marcellus Results: WDA Utica Results (1) vs Avg WDA Marcellus Test Wells Wells (Average) Well…
  18. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 18
    Upstream WDA Utica Appraisal Program Short Term Plan Forward WDA UTICA TESTING TIMELINE Pad Wells Status Test Timing (FY) 1 E09-M 1 Producing Initial On-line Plan to drill 10 total Utica appraisal wells 2 NF-A 1 Producing Sand…
  19. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 19
    Upstream EDA Utica Update Seneca DCNR 007 Utica Well Among the Best in Northeastern PA SRC EDA Tract 007 Northeast PA Utica Well Performance Tioga and Potter County Utica Test Well Gathering Line In-Service November 2016 800…
  20. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 20
    Upstream California Oil Stable Oil Production Minimal Capital Investment Free Cash Flow Positive FY16 Gross Production Daily 1 Location Formation Method Production (Boe/d) East 1 Temblor Primary 770 Coalinga 2 North Lost…
  21. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 21
    Upstream California Average Daily Net Production Less than 40 Million Annual Capital Spending Needed to Keep CA Production Flat California Annual Capital Expenditures (MM) California Average Net Daily Production (BOE/D) 9,699…
  22. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 22
    Upstream Future Development Focused on Midway Sunset North Midway Sunset Economics North MWSS MWSS Project IRRs at 55/Bbl(1) Sec. 17N Acreage 72% 40% 30% Pioneer NMWSS SMWSS Farm-in Projects South MWSS Modest…
  23. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 23
    Upstream Proved Reserves & Development Costs Total Proved Reserves (Bcfe) Natural Gas (Bcf) 3,000 Crude Oil (MMbbl) Fiscal 2016 Proved Reserves Reconciliation (Bcfe) 2,500 2,344 Proved Reserves - FYE '15 2,344 FY '16…
  24. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 24
    Upstream Seneca Production Significant base of long-term firm contracts and relatively strong near-term regional pricing outlook supports Appalachian development program that will drive 10%+ annual Appalachian production growth…
  25. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 25
    Upstream Long-term Contracts Supporting Appalachian Production Seneca will continue to layer-in firm sales contracts with attractive realizations at regional pricing points to lock-in drilling economics and minimize spot exposure…
  26. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 26
    Upstream Firm Transportation Commitments Volume Delivery Demand Charges Production Source Gas Marketing Strategy (Dth/d) Market (/Dth) Firm Sales Contracts Currently In-Service Northeast Supply EDA -Tioga County Canada…
  27. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 27
    Upstream Firm Sales Provide Market for Appalachian Production FY 17 Net Contracted Volumes (Dth per day) Contracted Index Price Differentials ( per Dth)(1) 359,200 355,800 Gross vs. Net Firm Sales Volumes (Dth per Day) Q3…
  28. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 28
    Upstream Strong Hedge Book Natural Gas Swap & Fixed Physical Sales Contracts (Millions MMBtu) 150.0 Remaining Fiscal 2017 Natural Gas Production 80% hedged (1) at 3.30 per MMBtu 100.0 86.4 58.9 35.3 50.1 50.0 31.4 8.4…
  29. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 29
    Upstream Fiscal 2017 Production and Price Certainty FINANCIAL HEDGE + FIRM SALE = PRICE CERTAINTY 200 57 Bcf realizing net 3.09/Mcf (1) 165 180 Bcfe 5 Bcf of Additional Basis Protection 10 Bcfe 5.5 Bcf (2) (3) 2 - 17 Bcf…
  30. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 30
    Upstream Operating Costs Appalachia LOE & Gathering California LOE Seneca Resources Consolidated /Mcfe /Boe /Mcfe 1.70 0.81 1.52 1.55 0.73 0.22 0.72 16.17 16.80 0.17 0.20 0.22 14.83 0.42 0.14 0.11 (1) 0.39 (1) 0.38 (2)…
  31. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 31
    Midstream Businesses 32
  32. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 32
    Midstream Midstream Businesses Midstream Businesses System Map Midstream Businesses Adjusted EBITDA (MM) Pipeline & Storage Segment Gathering Segment 278 285 Empire Pipeline, Inc. 250 257 FERC-Regulated NFG Supply Corp.…
  33. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 33
    Midstream Integrated Development WDA Gathering System Gathering System Build-Out Tailored to Accommodate Senecas WDA Development Clermont Gathering System Map Current System In-Service 70 miles of pipe/26,220 HP of compression…
  34. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 34
    Midstream Integrated Development EDA Gathering Systems Gathering Segment Supporting Senecas EDA Production & Future Development Wellsboro Gathering System Capital Expenditures (to date): 7 Million Capacity: 200,000 Dth per day…
  35. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 35
    Midstream Infrastructure Expansions Bolster Supply Diversity Expanding Our Pipelines to Assure Supply Security for New York Markets Integration of Senecas WDA Production Into Broader Interstate System Northern Access 2015…
  36. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 36
    Midstream Empire System Expansion Foundation Shipper Agreement Provides Major Commitment Needed for the Empire North Project Target In-Service: as early as Nov. 1, 2019 System: Empire Pipeline Estimated Cost: 150 to 200 million…
  37. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 37
    Midstream Continued Expansion of the NFG Supply System Future NFG Supply System Expansions Line D Expansion Project Target In-Service: Nov. 1, 2017 Contracted Capacity: 77,500 Dth/d from an interconnect with TGP 300 at Lamont,…
  38. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 38
    Midstream Pipeline & Storage Customer Mix Customer Transportation by Shipper Type(1) Affiliated Customer Mix (Contracted Capacity) 4.1 MMDth/d Affiliated Non-Affiliated Outside End User Pipeline 2% 6% 40% Marketer 54% 10%…
  39. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 39
    Downstream Overview Utility Energy Marketing 40
  40. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 40
    Downstream New York & Pennsylvania Service Territories New York Total Customers(1): 528,312 ROE: 8.7% (NY PSC Rate Case Order, April 2017) Rate Mechanisms: o Earnings Sharing o Revenue Decoupling o Weather Normalization o…
  41. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 41
    Downstream New York Rate Case Outcome On April 20, 2017, the New York Public Service Commission issued a Rate Order relating to NFG Distributions rate case (No. 16-G-0257) filed in April 2016. Rate Order Summary: Revenue…
  42. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 42
    Downstream Utility: Shifting Trends in Customer Usage Usage Per Account (1) Residential (Mcf) Industrial (MMcf) 150 40 125 35 100 30 75 25 50 20 12-Months Ended March 31 43 (1) Weighted Average of New York and…
  43. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 43
    Downstream Utility: Strong Commitment to Safety Capital Expenditures ( millions) 150.0 Capital Expenditures for Safety Recent increase due to 60MM upgrade Total Capital Expenditures of the Utilitys Customer Information System and…
  44. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 44
    Downstream A Proven History of Controlling Costs O&M Expense ( millions) 250 All Other O&M Expenses O&M Pension Expense O&M Uncollectible Expense 200 199 200 193 189 9 9 178 10 7 6 28 24 33 23 20 150 100 163 160 166 152…
  45. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 45
    Appendix 46
  46. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 46
    Appendix Marcellus Operated Well Results WDA Development Wells: Producing Well Average IP Rate Average Average Treatable Area Count (MMcfd) 30-Day (MMcf/d) Lateral Length (ft) Clermont/Rich Valley (CRV) & Hemlock 121(1) 6.9 5.3…
  47. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 47
    Appendix Marcellus Shale Program Economics 1,150 Locations Economic Below 2.00/MMBtu NYMEX / DAWN Pricing Net Realized Locations Completed Average Price(2) Anticipated Delivery Prospect Product Remaining Lateral 3.00 2.75 2.50…
  48. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 48
    Appendix Hedge Positions Natural Gas Volumes in thousand MMBtu; Prices in /MMBtu Fiscal 2017 (last 6 mos.) Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Avg. Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume…
  49. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 49
    Appendix Seneca WDA Joint Development Agreement On June 13, 2016, Seneca announced the extension of asset-level joint development agreement with IOG CRV Marcellus Transaction Capital, LLC, an affiliate of IOG Capital, LP, and funds…
  50. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 50
    Appendix Non-GAAP Reconciliations Adjusted EBITDA Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months FY 2013 FY 2014 FY 2015 FY 2016 Ended 03/31/17 Total Adjusted EBITDA Exploration & Production…
  51. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 51
    Appendix Non-GAAP Reconciliations Capital Expenditures Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2017 FY 2013 FY 2014 FY 2015 FY 2016 Forecast Capital Expenditures from…
  52. May 2017 Second Quarter Update Investor Presentation – National Fuel Gas Co. – slide 52
    Appendix Non-GAAP Reconciliations E&P Operating Expenses Reconciliation of Exploration & Production Segment Operating Expenses by Division (000s unless noted otherwise) Twelve Months Ended Twelve Months Ended September 30, 2016…

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